What is a unicorn?

What is a unicorn? Thanks for asking!

A unicorn is a privately-owned start up company valued at over $1bn when launched on the stock market. That’s right, we’re not talking about mythical animals, but economy and finance! The term was popularised in 2013 by venture capitalist Aileen Lee, with the choice of word reflecting the rarity of such success stories. Even more rare are decacorns and hectacorns, which have a value of over $10bn and $100bn respectively. Business analytics platform CB Insights reported that there were 450 unicorns in the world as of October 2020. That number has quadrupled since 2014. Some of the largest are well known, like Byte Dance, Snapchat or AirBNB for example, but most are unknown. Around a half of unicorns are American, and over a third are from Asia. Meanwhile, 16% are from Europe. According to GP Bullhound, the UK is Europe’s leading country by number of unicorns, with 30 in total and a combined value of $87bn. Five new UK companies have achieved that status since last year: Snyk, Checkout.com, Rapyd, HealthTech Babylon and MagicLab.

Are you saying all I need is a good idea to turn into my very own unicorn? 

Well you need a strategy too and most importantly investors. Raising capital is where unicorns are particularly strong and to do that they go through external funding rounds. When a project appeals to investors, they take a chance on the future success of that startup. There’s no expectation of an immediate result, but in the long term investors will get back a return on their investment when the company is sold or launches on the stock market.

Well if a company gets to be worth over $1bn, its investors must become super rich! In under 3 minutes, we answer your questions!

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